Economist: Ecuador, Chevron and pollution Justice or extortion?

I purposefully did not post this economist article yet because I wanted to get the response from Steven Donziger, the attorney's trying the case on behalf of the indigenous tribes. I was just on a conference call him, and both he and his their media rep explained the nefarious way the Economist reporter misrepresented what he was writing, didn't explain it was for the Economist, and only interviewed them for minor details. Steven Donziger wrote a letter the editor of the Economist, which will be published in the June 13 copy of the Economist.

Check out the BS flung by the Economist in this article (pretty surprised by them):

HIDDEN behind a row of trees and a rusted barbed-wire fence on a rutted dirt road in the Ecuadorean jungle, Shushufindi 61, a pit in which oil waste is dumped, is hardly a beauty spot. But it has attracted a string of visitors ranging from Hollywood actresses to Ecuador’s president, Rafael Correa, and managers from Chevron, an American oil company. It is one of several hundred such pits that are at the centre of a long-running legal wrangle between Ecuadorean and American activists and Chevron. For the activists, the case shows that oil companies are nowadays held accountable for their actions in developing countries. For Chevron’s supporters, the case amounts to an attempt at judicial extortion that throws doubt on whether multinational oil companies can ever get a fair deal in parts of Latin America today.

At issue is waste dumped by Texaco (bought by Chevron in 2001) as long ago as the 1960s in the region around Lago Agrio in the Ecuadorean jungle. From 1977 onwards, Ecuador’s state-owned oil company (now called Petroecuador) took a 62.5% stake in the field, though Texaco continued to operate it. In 1992 Petroecuador took over the whole operation and Texaco withdrew from Ecuador.

In a suit first filed in a New York court in 1993, lawyers representing 30,000 people in the Lago Agrio area argued that billons of gallons of waste dumped by Texaco in several hundred pits such as Shushufindi 61 caused damage to human health as well as to the jungle. They also argued that the oil company should compensate Indian people for their forced displacement. American judges ruled three times that they had no jurisdiction over the matter.

But as a result of the publicity generated by the cases, Texaco agreed with the Ecuadorean government that it would clean up 161 pits, or its share of the total, at a cost of $40m. The work was done by 1998 and the government signed an agreement releasing Texaco from any further liability. Petroecuador was supposed to clean up the rest of the pits, but didn’t do so, partly because it continues to use some of them (including Shushufindi 61).

Meanwhile Ecuador enacted an environmental law, something it had previously lacked. This is not retroactive. Nevertheless the plaintiffs filed a claim against Chevron under this law in 2003 in a court in Lago Agrio. They sought $6 billion in damages. Last year a court-appointed expert, Ricardo Cabrera, filed a 4,000-page report arguing that Chevron was liable for no less than $27.3 billion in damages. Of this $9.5 billion is compensation for 1,400 deaths from cancers that he alleges were caused by the pollution; $8.4 billion is for “unjust enrichment”; the remainder is for environmental clean-up.

Chevron has filed a 9,000-page rebuttal of Mr Cabrera’s report. It disputes his fitness as an expert, arguing that he has little experience of the oil industry. It found evidence that he used the Amazon Defence Front, a group working for the plaintiffs, to collect soil samples from sites. Sections of his report repeat verbatim documents filed by the plaintiffs. Chevron also notes that in 2007 a California court dismissed as fabricated some individual claims that the pollution caused cancers; it fined one of the plaintiffs’ lawyers for this. As for “unjust enrichment”, a Chevron manager points out that Texaco’s total profits from its operations in Ecuador were only $497m, while over the 20 years to 1992 Ecuadorean governments received $25.3 billion in profits, taxes and royalties from the field.

The judge in Lago Agrio, Juan Nuñez, is expected to rule on the case later this year. He has made no secret of his sympathy for the plaintiffs. The lawsuit appears to have the backing of Mr Correa’s government. Last year it objected to the 1998 agreement with Texaco, arguing that since the company was the operator of the field it should have cleaned up all of the pits. The attorney-general charged seven former senior officials who had signed the agreement with fraud, as well as two Ecuadorean lawyers for Chevron.

Chevron has filed a claim in an international arbitration court in The Hague and has asked the American government to review Ecuador’s trade preferences. But it faces political pressure in the United States as well as in Ecuador. On May 4th Andrew Cuomo, New York’s attorney-general, sent a letter to Chevron requesting information on the case on behalf of the state’s pension funds, which have more than $1 billion invested in the company.

If the Ecuadorean courts rule against Chevron, the plaintiffs’ lawyers can be expected to file suit in the United States to collect the settlement. Since they are working on a contingency basis, they stand to gain a substantial portion of any damages.

Texaco may have benefited from Ecuador’s past lack of environmental standards. It is questionable whether any of the pits would have been cleaned up had it not been for the campaigners. But the lawsuit may now be preventing Chevron from helping Petroecuador to clean up the rest. Ecuadoreans were the main beneficiaries from the oil—although some of them suffered some damage from it. They will also be the most important victims if the Chevron case shows that the rule of law is the servant of politics in Ecuador.

NYtimes: In Ecuador, Resentment of an Oil Company Oozes

MORE Chevron in Ecuador! NYtimes:

Mention to Anita Ruíz the name of the giant oil company Chevron, and she trembles with rage. At her wooden hut here in the Amazon forest, where oil-project flares illuminate the night sky, she points to a portrait of her youngest son, who died seven years ago of leukemia at age 16.

“We believe the American oilmen created the pollution that killed my son,” said Ms. Ruíz, 58, who lives in a clearing where Texaco, the American oil company that Chevron acquired in 2001, once poured oil waste into pits used decades ago for drilling wells.

Texaco’s roughnecks are long gone, but black gunk from the pits seeps to the topsoil here and in dozens of other spots in Ecuador’s northeastern jungle. These days the only Chevron employees who visit the former oil fields, in a region where resentment against the company runs high, do so escorted by bodyguards toting guns.

They represent one side in a bitter fight that is developing into the world’s largest environmental lawsuit, with $27 billion in potential damages.

Chevron is preparing for a ruling by a lone judge in a tiny courtroom on the top floor of a shopping center in Lago Agrio, a town rife with slums that Texaco founded in the 1960s as its base camp in the Amazon.

Chevron faces claims for an era when oil companies were less purposeful about protecting the environment than they are today. It also faces potentially huge damages in a country where American corporations once wielded strong influence but are now treated with discourtesy, if not contempt.

The sympathies of the judge, a former military officer named Juan Nuñez, are not hard to discern, and he appears likely to rule against Chevron this year. “This is a fight between a Goliath and people who cannot even pay their bills,” Mr. Nuñez, 57, said in an interview in his office, where more than 100,000 pages of evidence were stacked to the ceiling.

But his ruling is not likely to end the case. Already, the dispute is the subject of intense lobbying in Washington, which could apply pressure to Ecuador on Chevron’s behalf. If the company loses, it is ready to pursue appeals in Ecuador and, if necessary, to seek international arbitration.

Texaco laid down stakes here in the 1960s, and began producing oil in the early 1970s when Ecuador was still under military rule. Before the oil began to flow, the region was inhabited by forest tribes, including the Cofán and the Siona-Secoya.

Political tension permeated Texaco’s presence in Ecuador much of the time it operated here in a partnership with the government, and by the time it was prepared to leave, in the early 1990s, a cleanup of its operations was needed.

So Texaco reached a $40 million agreement with Ecuador to clean a portion of the well sites and waste pits in its concession area, absolving it of future liability. But that cleanup, carried out in the 1990s, was far from the bookend Texaco hoped to achieve.

Instead, villagers in Ecuador became convinced they were getting sick from the pollution left behind. They filed suit in 1993 in the United States, and later claimed that their grievances were not covered by Texaco’s settlement agreement.

As the case snaked its way through American courts, Ecuador seemed to fall to pieces, going through 10 presidents in a decade by 2006. The American lawsuit was eventually thrown out, on grounds the case should not be tried in the United States, and the plaintiffs reformulated it and filed it here.

Today, Chevron has absorbed Texaco, and Ecuador has gone through a metamorphosis under the leftist President Rafael Correa. He has repeatedly sided with the plaintiffs, calling Chevron’s Ecuadorean past “a crime against humanity.”

Such sentiment holds strong appeal to those who claim that people here, like Ms. Ruíz’s 16-year-old son, are dying from the pollution that Texaco spawned. Citing scientific studies, the plaintiffs claim that toxic chemicals from Texaco’s waste pits, including benzene, which is known to induce leukemia, have leached for decades into soil, groundwater and streams. A report last year by Richard Cabrera, a geologist and court-appointed expert, estimated that 1,400 people in this jungle region — perhaps more — had died of cancer because of oil contamination.

Chevron rejected the claims, contending that Mr. Cabrera had no medical evidence to back up his conclusion that the company should pay $2.9 billion just to compensate for excess cancer deaths.
Continues.....

Chevron Trying to “Greenwash” Polluter Image In Washington Conference On Clean Technology Oil Company Scrambling after Media Coverage Exposes Enviro

Chevron Ecuador Saga continues........

Amazon Defense Coalition:

Washington, D.C. (May 14, 2009) – Chevron today is taking part in a “Green Technology” roundtable in an apparent attempt to deflect some of the harm caused by its increasingly high profile as a corporate polluter in Ecuador, where it faces a potential $27 billion clean-up tab for dumping billions of gallons of toxic waste into the Amazon, campaigners who monitor the company said today.

The meeting, entitled “Green Technology and the Developing World: Global Energy Challenges, Economic Development and the Deployment of Green Technologies,” is being held just a week after CBS News’ 60 Minutes aired a story highlighting the extensive toxic contamination that the company left behind in Ecuador’s Amazon rainforest. Kristen Thorne, a Corporate Advisor on Global Issues and Policy for Chevron, is expected to participate in the roundtable discussion to introduce members of Congress to the company’s so-called “green” energy policies.

Chevron’s participation in the event is little more than an attempt to distract Congress from damaging reports regarding the environmental disaster Chevron left behind in Ecuador, including a report aired on CBS News’ 60 Minutes, according to Kevin Koenig, a corporate campaigner with Amazon Watch, a group that monitors Chevron’s environmental record.
“Chevron’s participation in a ‘green’ energy roundtable discussion is laughable,” said Koenig. “This so-called discussion by one of the world’s worst corporate polluters is just the latest example of the company trying to deceive the public while it uses Ecuador as its trash bin.”

Chevron faces a potential liability of $27 billion in a 15-year class action lawsuit over the environmental damage in Ecuador, which experts have called the "Amazon Chernobyl". The lawsuit, being heard in Ecuador at Chevron’s request, alleges that Texaco (now Chevron) dumped more than 18 billion gallons of toxic waste into a pristine area of rainforest that was once home to six thriving indigenous groups.

Texaco also gouged more than 900 large, unlined pits out of the jungle floor to store oil sludge left over from exploration and well maintenance that are still leaching toxins into soils and groundwater, according to an independent court expert in the case.

A decision in the case is expected later this year.

Attempting to brand itself as an environmentally conscious company is becoming more difficult for Chevron as the company’s toxic legacy in Ecuador has garnered extensive news coverage by large media outlets in the past few weeks. Reports about the pollution have appeared in the Wall Street Journal, New York Times, Washington Post and on National Public Radio, among others.

Chevron’s failure to clean-up the pollution in Ecuador led recently to the company being named to two separate “Worst of 2008” lists by corporate and environmental watchdog groups.

Bowoto v. Chevron

A similar case to the ChevronToxico Ecuador case, but in Nigeria: Bowoto v. Chevron

From EarthRights International:

Bowoto v. Chevron is a landmark human rights case that went to trial in a US federal court in San Francisco in November 2008. Brought under the Alien Tort Statute, the suit seeks to hold Chevron accountable for serious human rights violations committed abroad. Chevron was charged with egregious human rights abuses arising from its complicity with the notorious Nigerian military and "kill and go" mobile police against members of the Ilaje community of the Niger Delta. The Ilaje were protesting environmental and economic damage caused by Chevron's oil producing activities in their area community.

The lawsuit is based on a 1998 incident in which Nigerian soldiers shot nonviolent protesters at Chevron's Parabe offshore platform. The soldiers were paid by Chevron, ferried to the platform in Chevron-leased helicopters, and supervised by Chevron personnel. Two protesters were killed in the brutal attack and others were injured and subsequently tortured.

After ten long years, the trial provided the Nigerian villagers with the opportunity to confront the oil giant and demand public accountability for the company's involvement in gross human rights abuses. The plaintiffs sought compensation for the murders and the injuries suffered. A related case also sought ongoing transparency by Chevron about its use of the Nigerian police and military.

Although U.S. District Court Judge Susan Illston had previously found that there was sufficient evidence to allow a jury to find Chevron liable for the human rights abuses suffered by the plaintiffs, in November 2008 a jury found in favor of the defendants on all charges. The plaintiffs have now filed a notice of appeal to the Ninth Circuit Court of Appeals, and are seeking a new trial due to improper conduct by Chevron’s lawyers and other irregularities. Nonetheless, regardless of the outcome of the appeal, the case has established and reinforced important rules supporting accountability of parent corporations for actions taken nominally by their foreign subsidiaries, and basic principles of international human rights law.

Click for Case Documents

NYtimes: When Chevron Hires Ex-Reporter to Investigate Pollution, Chevron Looks Good

In the ongoing saga of the Chevron Ecuador case which I have posted on several times, Chevron prepared a response to the 60 minutes story:

NYtimes articles:

What did Chevron do when it learned that “60 Minutes” was preparing a potentially damaging report about oil company contamination of the Amazon rain forest in Ecuador? It hired a former journalist to produce a mirror image of the report, from the corporation’s point of view.

As a demonstration of just how far companies will go to counteract negative publicity, the Chevron case is extraordinary. Gene Randall, a former CNN correspondent, spent about five months on the project, which was posted on the Internet in April, three weeks before the “60 Minutes” report was shown on May 3.

“Chevron hired me to tell its side of the story,” he said. “That’s what I did.”

The two videos — one by CBS, the other by a corporation being scrutinized by CBS — run about 14 minutes long. They each discuss a class-action lawsuit filed by Ecuadoreans who accuse Texaco, a company acquired by Chevron in 2001, of poisoning the rain forest.

An Ecuadorean judge is expected to rule soon on whether Chevron owes up to $27 billion in damages, which would make the case “the largest environmental lawsuit in history,” the “60 Minutes” correspondent, Scott Pelley, said.

Both videos start with a correspondent appearing on camera and calling it a “bitter” dispute. But from there, they diverge. The “60 Minutes” report visits the rain forest, talks to the Ecuadorean judge and interviews a Chevron manager. The Chevron video interviews the same Chevron manager, as well as five professors who are consultants to the oil company, but none of the plaintiffs.

The Chevron video never directly claims to be journalism. But a casual viewer could be swayed by the description — “Gene Randall reporting” — and the journalistic devices used, including file footage of the rain forest and over-the-shoulder interviews with experts. Chevron posted the video on YouTube as well as its own Web site devoted to the lawsuit.

Chevron declined to answer questions about the video. But in a statement, it said that “we produced this video in response to a campaign waged by trial lawyers. They’ve turned to Hollywood to tell a fictional story. We’ve turned to an award-winning, former journalist to tell a factual story.”

Mr. Randall, who has been a corporate consultant since leaving CNN in 2001, had worked with Chevron once before, as an interviewer of the company’s chief executive for a corporate Web video. When the company approached Mr. Randall late last year, he said he had researched the Ecuador lawsuit and “became convinced that their side had not gotten out there.”

The first Google search result for the words “Chevron in Ecuador” shows a Web site created by Amazon Watch, an environmental activist group, that blames “Chevron’s negligence” for injuries and deaths in the country. Chevron has since bought Google ads so that its Web site about the lawsuit, which includes Mr. Randall’s video, appears as a sponsored link.

Mitch Anderson, a campaigner for Amazon Watch, said that Chevron had resorted to “embarrassing public relations tactics” because credible news sources had not sufficiently framed the report the way they would like, namely, to “to place all of the blame for Texaco’s environmental disaster in Ecuador on PetroEcuador,” Texaco’s former partner.

Mr. Randall’s video acknowledges the claims of the plaintiffs many times, primarily to set up Chevron’s response. “This is not a news report,” he said in an interview. “This is a client hiring a provider to tell its side of the story.” The video ends with a voiceover saying “Gene Randall reporting.”

Jeff Fager, the executive producer of “60 Minutes,” said his staff would have liked the same access that Mr. Randall had to Chevron. The oil company’s chief environmental scientist appears in the corporate video, but “they wouldn’t let us interview her,” Mr. Fager said.

Mr. Fager emphasized that the “60 Minutes” segment was “well-reported and fair.”

“I’m sure that Chevron preferred the story they told to the one we told, but that’s not journalism, that’s advocacy,” he said.

Their advocacy may not have had a serious effect. While the “60 Minutes” report reached at least 12 million viewers on television, the Chevron-sponsored effort has received only about 2,000 views on YouTube. Chevron would not say how many views it had counted on its own Web site.

“Most companies like their own advertising best, and this is not a whole lot different,” Mr. Fager said.

60 Minutes Exposes Chevron's Destruction of Amazon Rainforest

Watch CBS Videos Online

http://chevrontoxico.com/

ChevronToxico

www.chevrontoxico.com

I met with the attorneys from this case yesterday, and it is shocking that this was allowed to go on. Beyond the emissions, this is the cost of driving your car, flying, buying things that aren't locally produced. This is capitalism at its best. HOOOORAY! This goes way beyond just an environmental issue. This is also a fundamental human rights issue.

From the WashingtonPost: Deep in the northern Ecuadoran rain forest, next to pits filled with noxious sludge, a lawyer on his very first case argued that a U.S. oil company had deliberately fouled a swath of jungle nearly the size of Delaware during two decades of production.

Wearing a straw hat for the recent outdoor hearing, Pablo Fajardo was delivering the final arguments in a lawsuit that began in New York in 1993 against Texaco but is wrapping up here against Chevron, which bought Texaco in 2001. The stakes are high -- and so tinged with nationalism that Ecuador's President Rafael Correa has openly sided with the plaintiffs, 48 individuals representing tens of thousands of people in the region.

If the judge rules against Chevron, the company could face the largest damages award ever handed down in an environmental case, dwarfing the $3.9 billion awarded against ExxonMobil for the 1989 spill in Alaska.

A report by a court-appointed team last year concluded that pollution caused mainly by Texaco's Ecuadoran affiliate, Texaco Petroleum, had led to 1,401 cancer deaths in this stretch of Amazonian jungle. The team's leader, Ecuadoran geologist Richard Cabrera, reported finding high levels of toxins in soil and water samples near Texaco's production sites and assessed damages at up to $27.3 billion....(continues)